to investigate the underlying causes. Thestarting point is to keep it simple; as Einsteinis reported to have said, “Make everything assimple as possible, but no simpler.” We needsome raw data before even starting the audit:Far from comprehensive, but this is all basicinformation that should be readily available forany well-managed organisation with little, orno, additional work; it helps to create a pictureof the organisation to be audited, and much ofthe information is easily verified, and apparentanomalies are easily identified. Quite a lot ofthe data can be verified simply by checkingdocuments already in the public domain.

Another source of data that can be very useful
for identifying apparent anomalies is industry
surveys, but do ensure that they are country
and industry specific.

In a small- or medium-sized organisation
with relatively few suppliers, collecting
and collating such data should not be too
complex or expensive. However, in larger
organisations, such as our fictional retailer,
where there may be hundreds of suppliers in
many countries, it can become a very complex
and expensive activity that diverts attention
from the organisation’s core business. There
are organisations that provide this service,
and they have a wealth of comparative data,
including survey data, that can be used for
comparison/verification purposes.

Some points to consider:

· Is the average basic pay broadly
consistent with the data available from
industry surveys?

· Does the overtime level appear to be
broadly consistent with the data available
from industry surveys?

· Is the income/turnover per FTE broadly
consistent with data available from
industry surveys?

· Are total raw material costs consistent
with both the number of FTE employees
and turnover?

· Is the percentage of voluntary leavers
(resignations) unusually high?

· Are the data provided consistent with
data in the public domain?

None of the above is conclusive; they are
merely indicative and should inform some of
the points that an auditor will wish to clarify.

So how do you confirm the truth of what
you are being told? This is a major problem
because dishonest suppliers will provide you
with the answers they think you want to